Georgia View: The Real Politics Of Green

Bill Crane

When your hear the phrase, “the politics of green,” visions of Al Gore, Michael Moore and even Green Party Presidential nominee Cynthia McKinney may dance through your head.

This isn’t about that. This is about the real politics of green – class envy and the redistribution of wealth. The U.S. income tax was made possible by the Sixteenth Amendment to the Constitution, and ratification by the required three-fourths of states, becoming the law of the land in 1913. Prior to that, taxation by the federal government was evenly divided among states by using census data; each state committed an equal amount of revenue based upon its population headcount.

The shift to taxing individuals was largely sold with one simple credo, “Soak the rich.” Congress initially levied an income tax of one percent on personal incomes and six percent on incomes above $500,000. By 1918, the top income tax rate had increased to 77 percent on any income over one million dollars – to finance World War I.

The current recession is having a significant and ongoing impact on revenue collections by the state of Georgia. The primary sources of state and local government revenue are sales tax, income tax and property taxes. All three sources have declined precipitously since late 2008.

Gov. Sonny Perdue and the leadership of the Georgia General Assembly appointed a non-partisan commission to put all sources of government revenue on the table and determine a combination more sustainable (though not in a “green energy” sort of way) during tough economic times.

While many of us are busy preparing for the holiday season, members of the Special Council on Tax Reform and Fairness are wrapping up a “special package” of revenue recommendations for the Georgia General Assembly when members return in mid-January (conveniently post-election season). This group’s final recommendations require a single up or down vote by the General Assembly to be passed into law. And as post-partisan and progressive as this might sound, the special council’s recommendations will likely include some very unpopular changes. Taxing services appears to be garnering the most support in early discussions.

During better economic times, Gov. Zell Miller removed the four percent tax on food and later on pharmaceuticals. Since then governors in both parties, the General Assembly and even voters, via a series of Constitutional amendments, have given tax breaks to a wide variety of groups including businesses, senior citizens and tree farmers.

The legislation creating the council named economists, representatives of business organizations, the governor, and appointees chosen by Speaker David Ralston and Lt. Gov. Casey Cagle. Here is the line-up:

Roger Tutterow, Mercer University; David Sjoquist, Andrew Young School of Policy Studies, Georgia State University; Christine Ries, Georgia Institute of Technology; and Jeffrey Humphreys, Selig Center for Economic Growth at UGA’s Terry College of Business.

As there is no “silver bullet” to restore the revenues lost by shrunken incomes, devalued real estate and constrained consumer purchasing, the council will be looking for another “Hail Mary” pass revenue generator like the Georgia Lottery (another Miller creation).

The state best weathering this recession is Texas, which has no income tax and one of the lowest levels of unemployment. Critics remind us that the Texas economy is overly reliant on the energy sector, and demand for oil and natural gas remains somewhat resilient worldwide. Hmmmm … rich Texas oilmen. What about an out-of-state tax per gallon traced back to those Texas refineries and the families who still control billions in mineral rights? Sounds like a plan.